What Sent Stocks Soaring Overnight: DB's Jim Reid Explains

Earlier today we showed the three key headlines that summarized today's euphoric mood, and explain the general liftathon among massively oversold risk assets:

Stocks Rebound on Stimulus Speculation

Oil Rallies in Biggest 2-Day Surge Since August on Stimulus Bets

Yen Investors Homeward Bound as BOJ Stimulus Seen Boosting Bonds

And now, here is DB's Jim Reid putting it all together, and explaining that whatever it was that sent global equity markets to all time highs despite global economic slowdown as recently as last summer, is once again back front and center:

From Deutsche Bank's Jim Reid:

Yesterday the folks on Bloomberg TV finally had something to get excited about with the ECB meeting even if many will end up being once bitten twice shy this time round.

Indeed the last time the market flirted with Mr Draghi's seductive sound bites it eventually got jilted at the easing aisle. However there was a hint of giving him a second chance yesterday with a fairly positive market reaction to pretty firm signaling that the ECB will ease again in March.

Although the meeting is 7 weeks away could yesterday mark the start of another plate spinning cycle from the central banks?

The market chatter is now looking towards Kuroda to signal more action when the BoJ meet this time next week. Will Yellen also signal a more cautious and dovish stance at the FOMC next Wednesday?

We continue to think central bank money printing globally remains in the early stages. Such policies could go on for several years yet even if there are periodic pauses.

Ultimately we continue to think monetary policy will finance fiscal spending but that will take a recession to focus policy makers’ minds.

For now with inflation so low it would be strange if central banks didn't do more in the face of such market turmoil, low inflation and elevated risk factors. It won't be a major growth stimulant but any extra liquidity provided will have to go somewhere so it's too early to say the central bank era of elevating asset prices is over even if it's becoming more difficult to get the same response.

So let me see if I understand correctly? After all the experiences of the last 8 years, the "Markets" still believe that the way to economic growth and prosperity is Central Banks printing Unicorn money?

Excuse my ignorance but this reminds me of Einstein's definition of insanity....

"After all the experiences of the last 8 years, the "Markets" still believe that the way to economic growth and prosperity is Central Banks printing Unicorn money?"

Correct. QE, flooding Wall Street with cheap money is one tried and true policy that keeps the stock mkt bubble inflated. They can't bear much more market downside so they will QE until the currency gets killed.

If the system falls apart they will lose their power and wealth. The Nazis knew they would lose the war in 1944 but kept fighting until the end. They knew that losing meant the gallows or prison. Keep the ponzi going as long as possible.

No. They're not stupid. They know what's up. What options are left to them? Do they fold their hands and watch their make believe world crumble or print and make a shitload more money and power for themselves and their "friends"? It really boils down to that. They basically control the world since they control the money. Would you give that up without a fight?

Not all 'corrections' are natural. These days they are more likely to be artificial, i.e. Centrally Coordinated by TPTB.

If you're old school, you'll want a natural correction. If not, you won't care as long as you profit. Which are you?

p.s. Once again I notice that tons of hacks up vote you, w/o really thinking through your response. It is also quite possible that they don't care about our Central Planners, as long as they benefit themselves.

So what are we forfeiting now for numbers on a fucking board a cure for cancer or alsheimers,new national infrastructure,a viable space programme,immortality or extreme longevity,solving homelessness and unemployment,the opportunity cost is the cost of that forgone we are blowing our future on a mob of fucking criminals.

The problem is that this is very different. AT the same time, there could be a "pause" with some upward momentum, but how far can they levitate? Each new high is a lower than the previous...seems like an intentional landing and only the Banksters and God know what is happening behind the scenes that is illegal; especially in the oil derivative patch.

Remember the next time the market crashes; it will really crash into pieces and until TPTB are ready for that; it won't happen unless different "Powers' take the control levers.

It goes up so that those in the know can unload their crap. Have you seen the overnight volumes? It's not hard to ramp futures strongly, especially if you use anything approaching daytime volumes. The trick is unload those purchases in the follow-on when markets open and real volumes come in. 9:30 - 10:00 is the desperate money buying and they get to eat these overnight ramps. Then everyone else comes in and (in a normal world) price discovery takes us to where everything should be. Note that there is a special circle in hell reserved for many of the Citadel minions.